Investing Basics
Understand stocks, bonds, and basic investment concepts
lessons (10)
Introduction to Investing
Learn the basics of investing, including stocks, bonds, and how your money can grow over time.
Introduction to Stocks
Learn what stocks are, how they work, and the basic math behind buying and selling shares.
Introduction to Bonds
Learn what bonds are, how they work, and why they are considered safer investments than stocks.
Understanding Mutual Funds
Learn how mutual funds work, their benefits, costs, and how to calculate returns on pooled investments.
Calculating Investment Returns
Learn how to calculate the returns on your investments, including total return, percentage return, and annualized returns.
Percent Gain and Loss
Learn how to calculate and interpret percentage gains and losses on investments.
Diversification
Learn how spreading investments across different assets reduces risk and improves long-term returns.
Risk vs Reward
Learn how risk and potential return are connected in investing, and how to evaluate whether an investment makes sense for your goals.
Retirement Accounts Basics
Learn how retirement accounts like 401(k)s and IRAs help your money grow tax-advantaged over decades.
The Rule of 72
Learn the quick mental math trick to estimate how long it takes for your money to double.
Investing means putting money to work with the goal of growing it over time. Unlike saving, which preserves money safely, investing accepts some risk in exchange for potentially higher returns. Understanding basic investment concepts like stocks, bonds, mutual funds, and diversification helps you make informed decisions about building long-term wealth.
The key principles of investing include starting early (to benefit from compound growth), diversifying (not putting all eggs in one basket), understanding risk tolerance, and thinking long-term. Learning these fundamentals early in life can significantly impact your financial future, as even small regular investments can grow substantially over decades.
What Students Will Learn
- Understand the difference between saving and investing
- Explain how stocks, bonds, and funds work
- Calculate simple investment returns
- Understand the concept of diversification
- Apply the principle of risk vs. reward
Frequently Asked Questions
What is the difference between stocks and bonds?
Stocks represent ownership in a company - you share in profits and losses. Bonds are loans you make to companies or governments - they pay you interest and return your principal at maturity.
Why is diversification important?
Diversification spreads risk across different investments. If one investment performs poorly, others may perform well, reducing overall portfolio volatility and potential losses.
How much should I invest?
A common guideline is to invest 10-15% of your income for retirement. Start with what you can afford consistently, even if small, and increase as your income grows.